Generally, there are three options:
1) Filing with services:
In addition to the filing fees, you could pay a service provider to file the documents for you. After answering a few questions, some companies prepare and file the documents for you. However, you should know that the incorporation packages offered by “Do it yourself” services often don’t include the essential post-formation docs you need.
2) Hire a lawyer in order to file:
An attorney can help you answer tough questions. Also, you grow your company, might run into issues concerning employee agreements, protecting intellectual property, raising capital and more – areas of legal that a lawyer can help you organize from day one.
3) Do it yourself:
You’ll only have to pay filing fees and, depending on where you live, a registered agent. The process of incorporating is not complicated, and you can do on your own.
a. Choose a Corporate Name
You have to determine a unique name which is not registered with the Delaware Secretary of State. Also, the name must include a corporate ending or abbreviation thereof (ex. “Inc.”, “Incorporated”, “Company”, “Co..”, “Corporation”, “Corp.”, “Association”, etc.). You can check for availability in Delaware Secretary of State business name database.
b. Prepare and File Certificate of Incorporation
The incorporator is responsible for preparing the Delaware Certificate of Incorporation which officially creates the corporation when the state accepts for filing. The Certificate of Incorporation must contain the corporation’s name, its registered agent’s name, street address, the object of the corporation, the number of shares it is authorized to issue, the valuation of the shares, which is the cheapest price that a corporation can issue its shares to its initial founders, incorporator’s the name and address.
Corporate shareholders, directors, and officers do not have to be recognized in the Certificate. You can find this document on the Delaware Secretary of State website. Also, the incorporator’s sign and date must include the Certificate of Incorporation; you must be submitted Certificate of Incorporation with the appropriate fee to the Delaware Secretary of State by mail, fax or hand delivery but you cannot submit it online.
c. Required Personnel
A company must have at least one shareholder, one director, one registered agent and one officer secretary who can sign legal documents on behalf of the corporation and can record minutes of meetings. The director and registered agent do not have to be a shareholder. However, the director must be a natural person and registered agent must have an address — not a P.O. box — in Delaware. Also, the registered agent is the person responsible for receiving official communications for the corporation.
d. Stockholder Agreement
If your corporation has more than one stockholder, you should arrange a Stockholder Agreement. Stockholder agreement is optional. Any corporation which has more than one stockholder should have a Stockholder Agreement in order to reduce future problems of valuation, buyback, and unwanted third parties owning the stock.
So you’ve formed a new company – but what happens next?
Post incorporation is a series of steps and proceedings that needs to be taken care of after you formed your company and finished any necessary incorporation steps.It is a very important part of American corporate law and company forming system.Because of its complicated nature and importance it is always suggested that it should be done with specialized consultants.It should be remembered that as simple and easy as incorporation is, post incorporation is that much detailed and complicated.
Why Post Incorporation Is Important?
Unlike a public limited company which needs to obtain a trading certificate, a private limited company can commence business immediately. However, certain matters do still need to be dealt with.Every type of private corporation and startups in scope of American legal system needs to do their post incorporation after they finished their incorporation proceedings to further their corporate body, any corporate work without the post incorporation procedures will have many problems along the way and wont be able to do very simple corporate tasks.One of the first steps companies take after they are newly formed is the first board meeting and adopting a company by law.
In the early stages of your new company, the directors shall convene the first board meeting or pass the first board resolution relating to the “organisation” of the company which should include:
- Adopting the Constitution that govern the internal operations of the company
- Adopting the use of a company seal
- Authorising the issuance of shares and other types of securities
- Appointing officers
- Confirming the registered office address
- Confirming the first financial year end
- Appointing an auditor, if required
- Making banking arrangements
- Taking care of any other business
So as it is if you postpone your post incorporation it is nearly as like you formed and “half” or “unfinished” company.That is why post incorporation proceedings should not be passed by and should be done as soon as possible after incorporation complete.If you passed post corporation after your incorporation you should not worry and waste time about the consequences and just finish the post corporation as fast as possible.
An 83(b) election is an election made by a service provider to recognize the current income on equity compensations received for services which are subject to vesting or similar restrictions etc. For a taxpayer, filing an 83(b) election may result in significant tax savings. Most importantly, it allows founders and other shareholders to be taxed at the current fair market value of shares when they are granted.
There is an attractive option created by the Internal Revenue Code for Startup founders with 83(b) section of the Internal Revenue Code. The 83(b) election provides founders with the option to be taxed for the entire number of stocks that are subject to vesting at that present value, which might be fairly peppercorn.
By making an 83(b) election, you pay the tax when you receive the stock, not when it vests. This would be very advantageous for the growth expected company which has a potential of increased value and income. An important thing to mention is that an 83(b) election has to be filed with the IRS within 30 days of the purchase of the stock.
The clock is ticking!
Not filing an 83(b) election within 30 days of receiving shares subject to vesting may end up being a pretty unpleasant mistake. If the value of the company’s stock has gone up, the taxes can be even more than the service provider can pay.
These 30 days can go by very quickly, so, it would be a good choice to file the 83(b) election just after signing the restricted stock purchase agreement. Considering the procedures required by the U.S. Government, having a professional consultancy and service can boost your business in a safe and beneficial way. In Clemta, we provide you with the required support to successfully construct, develop and grow your company.
We are here to help. Use Clemta!